In Re Victor D. McGreevy Darlene A. McGreevy Debtors. Darlene A. McGreevy v. Itt Financial ServicesIn Re Victor D. McGreevy Darlene A. McGreevy Debtors. Darlene A. McGreevy v. Itt Financial Services
OPINION
Appellant Darlene A. McGreevy appeals a decision by the United States District Court for the District of Maryland affirming a bankruptcy court’s denial of her motion to avoid appellee ITT Financial Services’ lien on a shotgun and a rifle. The sole issue presented on appeal is whether Mrs. McGreevy’s shotgun and rifle constitute “household goods” within the meaning of 11 U.S.C. § 522(f)(2)(A). We agree with the district court and the bankruptcy court that these firearms are not household goods within the meaning of section 522(f)(2)(A), and therefore affirm.
I.
ITT Financial Services acquired a non-possessory, nonpurchase-money security interest in certain items of Mrs. McGreevy’s personal property, including one shotgun and one rifle, as security for a loan extended to Mrs. McGreevy. Mrs. McGreevy and her husband subsequently petitioned for bankruptcy under Chapter 7 of the Bankruptcy Code. During the pendency of the bankruptcy proceedings, Mrs. McGreevy filed a motion to avoid the lien against the shotgun and the rifle
1
pursuant to 11 U.S.C. § 522(f)(2)(A).
2
The bankruptcy court denied the motion principally on the authority of
In re Barnes,
II.
Section 522(f) allows debtors to avoid liens on “household goods” that are “held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.” 3 The issue presented in this case — an issue of first impression in this Circuit — is whether Mrs. McGreevy’s shotgun and rifle are “household goods” within the meaning of 11 U.S.C. § 522(f)(2)(A). 4
Essentially two different definitions of "household goods” have achieved prominence in the bankruptcy courts since the adoption of the Bankruptcy Code in 1978. For the reasons explained below, we reject both of these definitions in favor of a definition that we are convinced is more faithful to congressional intent as evidenced in the language of section 522(f)(2)(A).
The first definition used by the bankruptcy courts focuses upon the necessity of the goods to the debtor as he emerges from bankruptcy. Under this definition, only those goods that are found and used in or around the debtor’s home
and
that are necessary to a debtor’s fresh start after bankruptcy constitute “household goods.”
5
The district court and the bankruptcy court below,
see
App. at 53, relied upon this definition when they followed the rationale of
Barnes
in rejecting Mrs. McGreevy’s claim.
McGreevy,
We reject this definition of “household goods” because it is without foundation in the statute. Section 522(f)(2)(A) does not limit those household goods that are eligible for lien avoidance to only those goods that are necessary to a debtor’s fresh start. It allows debtors to avoid liens on all exempt household goods that are held primarily for personal, family, or household use. Congress, in effect, decided that all such goods are important to a debtor’s fresh start following discharge from bankruptcy, and it effected that decision by the inclusion — without limitation — of “household goods” in the list of personal property eligible for lien avoidance.
The second definition adopted in the bankruptcy courts is more defensible as a matter of statutory construction than the first definition, but it is still, we believe, inadequate. Under the second definition, “household goods” include
all
goods typically found and used in or around the home, whether or not they would be considered strictly necessary to a debtor’s fresh start.
8
The two courts that have applied this definition in determining whether firearms are “household goods” have come to different conclusions.
Com
This second definition is more tenable than the necessity definition because it is grounded at least generally in the statutory text. Ultimately, however, it fails to capture fully the functional nexus between the good and the household that distinguishes a household good from a good that happens (even typically so) to be used in the house. We therefore reject this definition as well.
We adopt for this Circuit, instead, a definition of “household goods” that explicitly incorporates a requirement of a functional nexus between the good and the household. Such a requirement, we believe, is necessary for the term to have the ordinary, common-sense meaning that was intended by Congress.
See Perrin v. United States,
We conclude that the requisite functional nexus exists where — and only where — the good is used to support and facilitate daily life within the house. It is the household good’s use for these purposes that distinguishes it from a good that is merely located and used within the house. Pots and pans are household goods because they are used to support and facilitate daily household living; a model car collection, by contrast, is not a household good because it serves no such purpose. Cf. 20 C.F.R. § 416.1216(a) (for purposes of Social Security Administration regulations, “household goods” defined to include “household furniture, furnishings and equipment which are commonly found in or about a house and are used in connection with the operation, maintenance and occupancy of the home”).
We therefore hold that “household goods” under section 522(f)(2)(A) are those items of personal property that are typically found in or around the home and used by the debtor or his dependents to support and facilitate day-to-day living within the home,
There are doubtless many goods found and used in the house for which a per se rule will be possible under the definition that we adopt above. For other goods, whether or not they constitute “household goods” will necessarily depend in whole or in part upon the cultural environment of the debtor or the geographic location of the debtor’s household. We are not prepared to conclude at this time that firearms per se can never be household goods under our newly-adopted definition, 12 and we need not go so far on the record before us. Even assuming that firearms can be household goods under certain circumstances, 13 it is clear that Mrs. McGreevy’s firearms are not household goods.
The McGreevys live in a townhouse that adjoins other townhouses in a complex of twenty-five to thirty townhouses. App. at 24, 27. Mrs. McGreevy testified that her husband uses the rifle primarily to hunt deer in Maryland, West Virginia, and Pennsylvania, id. at 21, and occasionally uses both firearms for target practice at her uncle’s house or in Mount Airy, id. at 25-26. Mrs. McGreevy noted only as an afterthought that the shotgun and rifle are also available for protection of their home and persons. Id. at 23. It is evident from this testimony that the McGreevys’ firearms are usually, if not exclusively, used away from the McGreevy household and its curti-lage and that they are not used by the McGreevys to support or facilitate their day-to-day household living. Accordingly, they do not constitute “household goods” under 11 U.S.C. § 522(f)(2)(A), as we define that term today.
CONCLUSION
We hold that the firearms at issue in this case are not “household goods” within the meaning of section 522(f)(2)(A). The judgment of the district court is therefore affirmed.
AFFIRMED.
Notes
. Mrs. McGreevy also sought to avoid the lien against her two televisions, a stereo, four other rifles, one other shotgun, a bow, arrows, binoculars, and a video cassette recorder. Appendix (App.) at 1. This appeal, however, concerns her motion only insofar as it was denied with respect to one rifle and one shotgun. Id. at 18-19.
. Section 522(f) provides:
Notwithstanding any waiver of exemptions, the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is—
(2) a nonpossessory, nonpurchase-money security interest in any—
(A) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor....
11 U.S.C. § 522(f)(2)(A) (emphasis added).
. The goods must be exempt from the debtor’s estate under either state or federal law. Maryland has exercised its right under 11 U.S.C. § 522(b) to opt out of the federal exemption scheme set forth in 11 U.S.C. § 522(d), and both parties agree that Mrs. McGreevy’s shotgun and rifle are exempt under the Maryland exemption statute.
See
Md. Cts. & Jud.Proc. Code Ann. § 11-504(b), (f);
McGreevy,
. Congress authorized lien avoidance for household goods under the new Bankruptcy Code because creditors were coercing debtors by threatening repossession of these goods. These goods were of relatively little resale value to the creditors. The threat of repossession of these goods, however, would often prompt debtors to pay their obligations because the debtors knew they would need these goods after bankruptcy and would not be able to afford to replace them. See H.R.Rep. No. 595, 95th Cong., 2d Sess. 126-27 reprinted in 1978 U.S.Code Cong. & Admin. News 5963, 6087-88.
. This definition has been adopted in both firearm lien avoidance contexts,
see infra
note 7, and non-firearm lien avoidance contexts,
see, e.g., In re Vale,
Some courts require that the items also be of limited resale value in order to be considered "household goods.”
See, e.g., In re McCain,
The Eighth Circuit, in
In re Thompson,
. In
Barnes,
the Bankruptcy Court for the District
of
Maryland held that a .22 pistol, a 30-06 rifle, two shotguns, and a .22 rifle were not household goods under section 522(f)(2)(A).
.
See, e.g., Barnes,
.
See, e.g., In re Caruthers,
Some courts have expanded this proximity definition to include "personal property that enables the debtor and his dependents to live in a usual convenient and comfortable manner or that has entertainment or recreational value ...
even though it is used away from the residence or its curtilage." In re Bandy, 62
B.R. 437, 439 (Bankr.E.D.Cal.1986) (emphasis added) (televisions, VCR, computer, answering machine, video game, stereo system, golf clubs, exercise equipment, tools, and lawnmower are household goods). Those courts that have considered whether firearms are “household goods” under this expanded definition not surprisingly have concluded that they are household goods.
See In re Champion,
These courts have not attempted to justify this definition under either the language or the structure of the statute, and we are unable to do so. A sine qua non of a "household” good must be use in or around the house. Any definition that does not incorporate at least this requirement is wholly without mooring in the statute. Congress provided lien avoidance for "household goods,” not for all "goods.”
.
See, e.g., Barrick,
.
See, e.g., Vale,
.It might appear at first blush that the statute's requirement that the household good be "held primarily for the personal, family, or household use of the debtor” independently ensures the existence of a functional nexus between the good and the household. This portion of the statute, however, requires only that the good be “held” for a personal as distinguished from a commercial use, not that it actually be used for such a purpose. This limitation was included to prevent lien avoidance on goods kept at the debtor's home but held either for business investment or for retail sale.
. The vast majority of bankruptcy courts that have addressed the issue have held, as the district court did here, that firearms can never constitute household goods.
See, e.g., Barnes,
. It appears from the fact-specific inquiry conducted by some courts that they would be receptive to claims that particular firearms can be household goods under section 522(f)(2)(A).
See, e.g., McCain,